I transferred $40K from a 401K account with Fidelity to my Roth IRA at Fidelity. How do I account for this in TurboTax?

You have to indicate in TurboTax that the distribution was rolled over to a Roth IRA. The rollover is taxable or partially taxable if you have basis (ie nondeductible contributions) in your IRA.

Enter your form 1099-R by following these steps:

1. In TurboTax Online, open your tax return
2. Click on Federal in the left-hand column, then on Wages & Income
3. Navigate to the list of income categories
4. Locate the section Retirement Plans and Social Security and click on the arrow on the right
5. Click Start next to IRAs, 401(k), Pension Plan Withdrawals (1099-R).
6. Enter your form 1099-R and follow the interview
7. When you arrive to the page Did you move the money to a Roth IRA?, click on the radio button Yes, this money was rolled over to a Roth IRA  and Click Continue

Enter the Form 1099-R that you received.

To enter, edit or delete a form 1099-R -

Click on Federal Taxes (Personal using Home and Business)
Click on Wages and Income (Personal Income using Home and Business)
Click on I'll choose what I work on (if shown)
Scroll down to Retirement Plans and Social Security
On IRA, 401(k), Pension Plan Withdrawals (1099-R), click the start or update button

Or enter 1099-r in the Search box located in the upper right of the program screen. Click on Jump to 1099-R

Online editions -

On the screen Did you get a 1099-R in 2024? Click on Yes

On the screen Let's import your tax info Click on Change how I enter my form
On the screen How do you want to add your 1099‑R? Click on Type it in myself

On the screen Who gave you a 1099-R? select the type of 1099-R you received and Continue